Options strategies for buyers

In most of the books regarding option strategies focussed mostly on sellers why there are no strategies mentioned for buyer side except few ?

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Probably because consistent and profitable Option Buying is difficult to strategize and teach. And it is geared towards getting the direction right, and doing that decisively. Option selling can be explained and strategized, easier to make the teacher look good.

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Yes correct … But there should be a balance there

I agree.
Option selling is more tact and probabilities. Successful option buying is artsy, intuitional, opportunistic and luck. Not easy to teach the latter :sweat_smile:

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If u think option buying is not helpful… look at this simple strategy called long strangle on monthly expiry contracts i.e. buy call and put of a certain instrument here in our case Banknifty. Delta chosen here is 10 for both options and is engaged 30 days before expiry and kept till expiry day.

Amazing results with very less capital deployed… backtested for last 5 years

coloured with max profit and loss

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Correct. Returns are super.

Only thing to consider here is trader’s psychology.

One needs to do this constantly for a year to see good returns.

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U are absolutely right. Even if I have shared this data first hand, I know its probability of working it more than failing but the psychology and stomach to digest the in between drawdowns and anxiety is never reflected in the data (apologies for foul language). :grin:
So to get such results, one needs to engage and forget to see it till expiry day… any in between intervention will spoil the party for sure. :nerd_face:

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just remove the fluke of Feb-March 2021 and gains will be reduced by 50%

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Well the long strangle and long straddle are there for the buyers but these strategies are two strategies combinations an option buyer can use but there are 90% strategies which involves buying as well as selling .but in selling we require a lot of margin money which is also require huge capital deployment . So any others strategies you guys use which involves only buying combination only. Sharing the knowledge would be much appreciated :slight_smile:

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nice observation man … !

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If you can predict the direction of an instrument you can simply buy an option in that direction. In trading whether one is profitable or not depends on both the accuracy of the system along with the risk - reward associated with the system. So option buying works and I use a simple naked nifty weekly option buying strategy.

To create books we need to generate content. If something is complicated one can generate more content. But simplicity works and works great compared to complexity.

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If you are an option buyer then you can follow the price action and RSI above 60 then only you can generate consistent profit in options.

Above 59 will not work ? :rofl:

has anyone tried yearly-options? what are your views

I think most people don’t see call options as a profitable way to trade. Those who buy options are risk takers and they are left on their own to make decisions. I wish we had more books discussing call option strategies. As an option contract simply cannot exist in the absence of a buyer.

How long have you been selling options?

Its because options buying payoff is unlimited - so you wont know when to take profits.

Whereas option seller the max profit is known before starting the trade - so just has to manage the risk.

Only real professional and mathematically inclined trades can make consistent money with option buying. For they need to know the direction of the market and also the speed at which the move will offset the time decay.